Opinion from a Libertarian ViewPoint

Posts Tagged ‘dollar hegemony’

De-Dollarization Accelerates: The Beginning of the End for US Dollar Hegemony in Southeast Asia? – LewRockwell

Posted by M. C. on January 14, 2023

The collapse of the US dollar is becoming a reality as China and Russia continue to buy gold and trade with their own currencies at an accelerated pace with many more countries around the world who are also racing to de-dollarize their economies.

By Timothy Alexander Guzman

The US is facing major moves by the global community to de-dollarize their economies.  The reserve status of the US dollar will eventually come to an end, maybe not anytime soon, but sometime in the future as it is facing numerous challenges not only from major powers such as Russia and China who are actively trying to rid themselves of the toxic currency, but also countries with smaller economies who are based in the Southeast Asian region which includes Singapore, Malaysia, Indonesia, Cambodia, Thailand, and Laos.  The globalist think tank, the Carnegie Endowment for International Peace (CEIP) published an article on August 22nd, 2022, on the US dollar’s waning influence in Southeast Asia titled ‘Southeast Asia’s Growing Interest in Non-dollar Financial Channels—and the Renminbi’s Potential Role’ stated what was taking place between China and several Southeast Asian countries:

China’s central bank—announced the launch of a new emergency liquidity arrangement that can be funded using renminbi and tapped by participating central banks during times of market stress. Three of the five participating central banks are Singapore’s, Malaysia’s, and Indonesia’s, which each recently renewed agreements with the PBOC implicitly aimed at reducing dollar usage in cross-border payments. This follows policymakers in Thailand, Laos, Cambodia, and Myanmar all announcing efforts to reduce dollar usage, as well as comments by Indonesia’s central bank head that consumers across five of Southeast Asia’s largest economies will soon be able to make intra-regional cross-border payments via linkages that avoid using the dollar as an intermediary, as is currently often the case

Interestingly, The CEIP listed several reasons why Southeast Asian countries want to dramatically reduce the use of US dollars are as follows:

Several factors are behind the various efforts aimed at reducing dollar usage in Southeast Asia. To begin with, many officials are concerned about the potential economic impacts of U.S. monetary policy tightening on the region given its high usage of the dollar; accordingly, some are seeking to reduce usage of the dollar in intra-regional trade payments as a means of curbing dollar reliance more broadly. Recent sanctions may also be spurring demand for alternative financial channels—for example, Myanmar’s military government is actively exploring how to circumvent EU and U.S. sanctions to transact with Russia

According to an article published by ‘Bank Indonesia calls against payments in US Dollars’ who translated the report by an Indonesian news portal called on what Nugroho Joko Prastowo of the Solo Bank Indonesia Representative Office said regarding Indonesian businesses using national currencies to reduce its reliance on the US dollar:

Bank Indonesia has urged importers and exporters to use national currencies in international payments in order to reduce Indonesian financial markets’ reliance on the US dollar, according to, an Indonesian news portal.  “About 90% of export-import payments are conducted in US dollars, while the share of Indonesian direct exports to the US is estimated at only 10%, and US imports account for 5%”

The report also mentioned that “China, Japan, Thailand, and Malaysia have already agreed to use the two-way payment mechanism, with Singapore and the Philippines planning to join the system, according to the economist.”  

Another article published by the on December 15th, 2021, ‘GT Exclusive: Myanmar accepts yuan as official settlement currency for border trade with China’ said that Myanmar’s usage of Chinese yuan will help break the US dollar dominance in the long term:

The yuan was included in the list of Myanmar’s official settlement currencies in January 2019. The move at that time was more symbolic, as all contracts and trade were still not settled in the Chinese currency.  Zhou said that the move, in the long term, will help break the monopoly of the US dollar in Myanmar’s foreign currency reserves.  The US has been abusing the dollar’s dominant status to impose arbitrary sanctions on other countries, and the yuan’s further expansion in Myanmar’s trade settlements may provide a shield against such a potential weapon, analysts said

Cambodia is on Board Dumping US Dollars

Why Cambodia with a population of close to 17 million people and a much smaller economic impact on the world’s economy is willing to drop US dollars is an important development.  The Diplomat, a current-affairs magazine based on analysis and commentaries from various authors on developments throughout Asia and the rest of the world published an article by Luke Hunt on the case of Cambodia’s attempt to stop using US dollars titled ‘Cambodia Reduces its Dependency on the US Dollar’ lays out the mood of the Cambodian government.

“Ever since United Nations peacekeepers arrived in war-torn Cambodia to oversee elections held in 1993, the U.S. dollar has been a mainstay of the local economy with a dual currency system providing steady exchange rates in a volatile place” but there is a monumental shift taking place when the National Bank of Cambodia (NBC) announced that it “would phase-out small-denominated U.S. dollar bills – $1, $2, and $5 notes – following negotiations with banks and micro-finance institutions (MFIs).”  Naturally it’s a step to reduce the dependency of the US dollar according to the NBC “Cambodia has to encourage the use of its riel, more. So, allowing the circulation of small U.S. bills is an obstacle in urging the use of the riel.”

There are several reasons for Cambodia’s move, one of them is to allow the use of digital currencies to “give the central bank more control over the Cambodian economy and bolster the local riel currency, which for decades suffered from a lack of confidence due to negative sentiment stemming from a 30-year war” in addition it will allow the central bank “control over monetary policy and interest rate settings and reduced costs in handling the sheer volume of $1 dollar notes circulating through the economy.” 

Hunt mentions the dark period of Cambodian history with the US-backed Pol Pot and the Khmer Rouge who destroyed Cambodia and it’s traditions and started a new revolution with a new culture that would begin on Year Zero, therefore everything before would be deemed irrelevant,

It’s a far cry from the late 1970s, when Khmer Rouge rule abandoned money, banks were abolished, and the NBC blown-up as Pol Pot tried to create a utopian, agrarian society that led to the deaths of an estimated 1.7 million Cambodians.” 

One of the darkest times in world history indeed.  It is a positive development that the NBC is encouraging the use of the Cambodian Riel for its economy, so the future seems promising.  NBC Governor Chea Chanto spoke at the 40th Anniversary of the re-establishment of the Riel

“he said demand for the currency had increased by an average of 16 percent a year for the last 20 years amid annual average growth rates of 7.8 percent and inflation at around 2.5 percent.” 

Chanto said that “I firmly believe all ministries, institutions, companies, enterprises, and those who actively participate in the process of developing the banking system promote the use of the riel, which is our national currency.”

According to an unidentified analyst “It’s also a matter of sovereignty and pride. It’s their country and they are entitled to have their own currency like anywhere else.”

Transitioning from the US dollar to the Cambodian Riel won’t be an easy task according to Michael Finn of the Khmer Times who authored ‘De-dollarisation: Views from Asia, US and Europe’ claims that

“Any reduction in the use of the dollar needs to be handled carefully, according to foreign chambers of commerce in Cambodia. They say the central bank is unlikely to fully phase-out the US currency and any sudden moves to end reliance on the dollar would be bad for business.”  European Chamber of Commerce Advocacy Manager Noe Schellinck said that 

To a certain extent, the dollarisation now can be ascribed to the success of the Cambodian economy, with a great influx of Foreign Direct Investment, compared to the historic context of when the dollarization came about.” But the Indonesian Chamber of Commerce President Dalton Wong disagrees with Schellinck’s assessment:

De-dollarisation is not a bad thing as it is a re-balancing of the fiscal and monetary policy tools. It is certainly not a complete displacement and substitution of the US dollar in favour of the Khmer Riel in trade and investment, which some observers and analysts seem to mischievously suggest, which is not so helpful. In fact, promoting a greater use of the Khmer riel will give greater monetary policy tools to the Cambodian author

See the rest here

Be seeing you

Posted in Uncategorized | Tagged: , , | 1 Comment »

Is Trump Using Nordstream 2 to Exit NATO?

Posted by M. C. on July 17, 2020

The Davos Crowd is making their big move to consolidate
power in Europe. Trump is working with Boris Johnson in the U.K. to
oppose that. That’s the simplified version of the chess board.

And this is why I think Trump refuses to give up on stopping Nordstream 2. He’s seen the depths to which The Davos Crowd will go to implement this radical change and he’s forcing the moment to its crisis, as T.S. Eliot put it.

He’s making the choice very clear for Merkel and company. If you want
Nordstream 2, suffer the consequences of having to do business without
the U.S.

This isn’t about Russia anymore, at all. It’s about Germany and the
future of the U.S. If Trump loses in November all of the work done to
slow down this push for transnational technocratic oligarchy will end.

The one thing I never thought I’d say is that Donald Trump is consistent, and yet on the subject of the Nordstream 2 pipeline he has been.

No single project has caused more wailing and gnashing of teeth than Nordstream 2. And since Nordstream 2 is simply the substitute for South Stream, which was supposed to come across the Black Sea into Bulgaria and then feed eastern Europe, this U.S. opposition to another Russian pipeline spans multiple administrations.

So, this is policy that goes far beyond simple 2020 electoral politics, Trump trying to look tough on the Russians, or his misguided Energy Dominance policy.

With Trump rescinding the sanctions exemption for Nordstream 2 he now has declared open war against Europe, specifically Germany over this project.

But here’s the thing, I think Trump is doing this for updated reasons that fit a different agenda than why the U.S. opposed Nordstream 2 previously, because he knows he can’t stop the pipeline now. All he can do is further alienate Germany, who he has targeted as the main problem in Europe.

Before I go any further, though, I think a little history lesson is in order.

U.S. opposition to Nordstream 2 is deeply ingrained on all sides of the political aisle in D.C. From Republicans still fighting the cold war to Democrats having deep ties to Ukrainian gas transit there are a multitude of reasons why Nordstream 2 is verboten in D.C.

On the other hand, Europe’s relationship with Nordstream 2 is, in a word, complicated.

Russian President Vladimir Putin scuttled South Stream back in late 2014 because the EU changed its pipeline rules during its development after the contracts were in place.

Most of that was U.S. pressure, but some of that was Germany’s Angela Merkel working with then-President Barack Obama to create the worst possible scenario for Gazprom – a pipeline that wasn’t profitable.

Merkel backed Obama’s play in Ukraine in 2014 as a power move to control prices for Russian gas into Europe, putting Soviet-era pipelines under EU gas directive jurisdiction.

The EU was always going to use Ukrainian gas transit as leverage over Putin to drive gas prices below Gazprom’s cost thinking they had no other options.

Putin famously pivoted to China, singing the mega-deal for Power of Siberia in retaliation to that. Since Putin had already brought Crimea in from the cold war and tacitly backed the breakaway of the Donbass Merkel was now the one on her back foot.

At the same time, to salvage the work done on South Stream to that point, Putin cut a deal with Turkish President Recep Tayyip Erdogan to replace South Stream’s volumes to eastern Europe with Turkstream’s to Turkey.

The plans for Turkstream include multiple trains into eastern Europe with countries like Serbia, Hungary and the Czech Republic itching for that gas.

Russia’s options were manifest and Putin deftly outmaneuvered Merkel and Obama. These events forced Merkel’s hand after she stupidly caved to the Greens over ending Germany’s use of nuclear power and now she needed Nordstream 2.

And so Nordstream 2 became a big geopolitical football because Merkel saw, as well, the opportunity to bring the recalcitrant Poles and Baltics under her control as well, solidifying long-term EU plans to engulf all of Euope to Russia’s borders. Read the rest of this entry »

Posted in Uncategorized | Tagged: , , , , , , , | Leave a Comment »